Behind the scenes of the HBOS and Lloyds TSB merger, two other famous names in the shape of Clerical Medical and Scottish Widows may find themselves merging. In the nineties, just to remind everyone, the High Street Banks devoured many of the well known Insurance Companies, and these two in particular went to HBOS and Lloyds respectively.
At the time Clerical Medical pleaded as a Mutual their capital raising ability was inhibited, but opportunistically they almost certainly had their eye on access to the large mortgage book, run and operated by Halifax, and how both those reasons have now run full circle, with the parent Company suffering the same fate.
Similarly at the time, Scottish Widows also caused Lloyds a bad case of financial indigestion, as shortly after the acquisition during the last recession, solvency margins of most Assurers needed propping up and Lloyds had to do the necessary, thereby curtailing their ability to do much else, which probably was a blessing in disguise, as they remain one of the few Banks not heavily caught up in the sub-prime mortgage crunch.
Obviously at this early stage of the merger between the two Banks, it is too soon to try and second guess what the fate of Clerical Medical and Scottish Widows will be, but rest assured we shall be watching this new development with interest, and report accordingly.